Netflix chief executive Reed Hastings has made the surprising admission that he believes arch-rival BSkyB should not have its movie channels regulated by the UK competition authorities.
Hastings, who launched the US film and TV streaming service in the UK and Ireland in January, said that he was looking for a "fair fight" with Sky over content rights but that immediate regulatory intervention was not right.
"Sky is a fearsome competitor, they have all six major [Hollywood studio] output deals," he said, speaking at the MediaGuardian Changing Media Summit on Thursday afternoon. "Right now there probably isn't a pressing need for government intervention but if we don't have one [of Sky's big studio deals] in a year or so …"
Last summer the Competition Commission provisionally concluded that Sky – which has sewn up deals with all the big six Hollywood studios for the UK rights to show films first in the pay-TV and video-on-demand windows – was anti-competitive and needed to be weakened to allow rivals to flourish.
However, earlier this month the investigation was widened to see if the arrival of Netflix, and expansion of Amazon-owned LoveFilm, might have changed the market.
Hastings said that if Netflix does not manage to pry one or two of the big studio deals from Sky "in a year or so" when they come up for renewal, then there would be a rationale to look at intervention.
"We are aiming for a fair fight," he said. "One of the big advantages is that we are £5.99 [per month], that is a fundamental difference in positioning. Frankly we think many people will get Netflix in addition to Sky Movies or Sky Atlantic."
Hastings would not give specific figures on the number of subscribers the UK service has managed to attract, but said that of the 45 other countries Netflix has already launched in the UK has the best sign-up rate compared to target.
"The UK has shown the biggest over performance we have ever seen relative to what we expected," he said, adding that he expects it to take maybe two years to be a success. "We are an insurgent and it should be a fascinating battle and consumers will benefit from that."
Hastings said that for him success would be signing up 10% of UK households, which would mean about 2.8m.
"The first big milestone is how many years it takes us to get to 10% of households," he said. "Not many services get to that, it is a big number, it might take us a couple of years. We want to become a full global service like YouTube."
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